A landlord bought a flat for ₹8,00,000. He wants to earn a 9% annual return on his investment after paying ₹2,000 per month for m…

Question

A landlord bought a flat for ₹8,00,000. He wants to earn a 9% annual return on his investment after paying ₹2,000 per month for maintenance. What should be the monthly rent he charges?

1. A. ₹7,000
2. B. ₹7,500
3. C. ₹8,000 (Correct answer)
4. D. ₹8,500

Correct Answer

Option C — ₹8,000

Detailed Solution & Explanation

The correct answer is ₹8,000.

Key Points

• The landlord needs a 9% annual return on ₹8,00,000 = ₹72,000 a year = ₹6,000 per month.
• Add the ₹2,000 monthly maintenance he must cover, and the rent = 6,000 + 2,000 = ₹8,000.
• Separate the *return on investment* from the *pass-through cost*: the tenant's rent must fund both the desired yield and the running expense.